ACCT 504 Week 8 Final Exam Set 2

ACCT 504 Week 8 Final Exam Set 2

Author: Christine Farr


1. (TCO A) A corporation has which of the following advantages? (Points : 5)
2. (TCO A) Preferred stock _____. (Points : 5)
3. (TCOs A, B) Below is a partial list of account balances for LBJ Company:
Cash $12,000
Prepaid insurance 1,300
Accounts receivable 7,000
Accounts payable 5,000
Notes payable 9,000
Common stock 22,000
Dividends 2,000
Revenues 45,000
Expenses 35,000

What did LBJ Company show as total debits?
4. (TCOs B, E) Which of the following statements is correct with regard to accrual accounting? (Points : 5)
5. (TCO D) Three different companies each utilize a different inventory costing method. If the price of goods has increased during the period, then the company using _____. (Points : 5)
6. (TCOs A, E) Equipment was purchased for $85,000. Freight charges amounted to $2,550 and there was a cost of $10,000 for building a foundation and installing the equipment. It is estimated that the equipment will have a $5,000 salvage value at the end of its 6-year useful life. Depreciation expense each year using the straight-line method will be _____. (Points : 5)
7. (TCOs D, G) When the market rate of interest is less than the stated rate of interest on the bond, the bond will require _____. (Points : 5)
8. (TCO C) Accounts receivable arising from sales to customers amounted to $50,000 and $45,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $150,000. Based on these transactions, the cash flows from operating activities to be reported on the statement of cash flows would be _____. (Points : 5)
9. (TCO F) If you are calculating the percentage change between 2 years worth of sales data, you are conducting a _____. (Points : 5)
10. (TCO F) Vertical analysis is also known as _____. (Points : 5)

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